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Internet of Everything Expected to Generate $613 Billion in Profits in 2013

Business Leaders in Global Study Believe Job Market, Wages and Information Security Will Improve With IoE

SAN JOSE, CA--(Marketwired - Jun 19, 2013) - The Internet of Everything (IoE) is expected to enable global private-sector businesses to generate at least $613 billion in global profits in 2013, according to the IoE Value Index study released by Cisco (NASDAQ: CSCO) today. The report -- announced via a global TelePresence event that connected more than 10 international locales -- found firms that optimize the connections among people, process, data and things will generate the largest profits.

The study of 7,500 global business and IT leaders in 12 countries reports that the United States, China and Germany are expected to realize the greatest value in 2013. However, the study also found that corporations could nearly double those profits through greater adoption of business practices, customer approaches and technologies that leverage IoE. While IoE is already driving private-sector corporate profits, it is estimated that an additional $544 billion could be realized if companies adjusted their strategies to better leverage it.

"The Internet of Everything has the potential to significantly reshape our economy and transform key industries," said Rob Lloyd, Cisco President of Development and Sales. "The question is who will come out on top and win in this new economy. This study shows us that success won't be based on geography or company size but on who can adapt fastest."

The Internet of Everything is the networked connection of people, process, data and things, and the increased value that occurs as "everything" joins the network. Several technology transitions -- including the Internet of Things, increased mobility, the emergence of cloud computing, and the growing importance of big data, among others -- are combining to enable IoE.

"This study confirms the potential for the Internet of Everything and our ability to make the world smarter, together," said SmartThings CTO Jeff Hagins, who participated in the global Cisco event. "With the SmartThings platform and open community, we believe that more developers and inventors will be able to participate in the value chain and ultimately bring the physical graph to life."

The Internet of Everything Value Index builds on research that Cisco conducted earlier this year, which found that global businesses could pursue as much as $14.4 trillion over the next decade by leveraging IoE to improve operations and customer service.

Additional Key Findings from the Study Include:

Among business leaders who participated in the IoE Value Index:

69 percent said they thought the global job market would stay the same or improve due to IoE.

89 percent thought wages would improve or stay the same.

In addition, business leaders believe that the Internet of Everything will help drive better information security -- an indication that they understand the importance of security and privacy to the growth of IoE. Fifty percent of business leaders said IoE would improve security while 26 percent thought there would be no change.

While businesses in the United States, China and Germany are poised to realize the greatest level of profits in 2013, IoE value is spread across firms around the globe. The 12 countries included in the study, which account for nearly 70 percent of global Gross Domestic Product, are expected to realize the following value from IoE in 2013:

Billions

1. United States

$253.0

2. China

$76.9

3. Germany

$54.4

4. Japan

$41.0

5. Australia

$35.6

6. France

$32.2

7. Canada

$30.2

8. United Kingdom

$28.4

9. India

$18.2

10. Brazil

$17.3

11. Russia

$17.0

12. Mexico

$9.2

Business leaders in emerging countries clearly expect to leverage IoE to their advantage. According to the research, these executives are the most bullish on capturing value (on a scale of 1-10):

1. India:

8.2

2. China:

8.0

3. Brazil:

7.9

4. Mexico:

7.4

5. Russia:

7.2

6. Non-emerging countries:

6.7

While the Internet of Everything is driving a huge amount of corporate profits, an additional $544 billion could also be generated in 2013 if companies adjusted their strategies to better capitalize on it. "That figure should be a wake-up call to businesses large and small that IoE can significantly add to their bottom line," added Cisco's Lloyd.

To capture more value in the IoE Economy, companies should:

Invest in high-quality technology infrastructure and tools.

Adopt and follow inclusive practices that enable all employees to contribute.

Develop effective information-management practices.

To maximize value from the Internet of Everything, firms should focus on the IoE-driven capabilities that will benefit their industries most:

Among industries, services ($158.8 billion) and manufacturing ($103.1 billion) are expected to realize the greatest IoE value in 2013.

The key drivers of IoE value in 2013 are expected to be:

Supply Chain:

$158.7 billion

Customer Experience:

$145.2 billion

Innovation:

$110.5 billion

Asset Utilization:

$109.7 billion

Employee Productivity:

$89.3 billion

An analysis of IoE-generated profits underscores that company size is not necessarily an indicator of which firms will benefit most from it. In fact, the study drives home that market incumbency is at risk as IoE grows in impact.

Expected IoE-generated profits in 2013 by company size:

500-1,999:

54.1% or $118.0 billion

2,000-9,999:

53.3% or $159.7 billion

10,000+:

52.4% or $335.6 billion

We are at the early stages of the development of the Internet of Everything, but firms have huge incentives to adapt now to take advantage of it. Over the next decade, $14.4 trillion in profits could be achieved by companies that leverage IoE either to create new value or to gain value from competitors that don't adapt as quickly or effectively to take advantage of new innovations.

Cisco (NASDAQ: CSCO) is the worldwide leader in IT that helps companies seize the opportunities of tomorrow by proving that amazing things can happen when you connect the previously unconnected. For ongoing news, please go to http://thenetwork.cisco.com.

Forward-Looking Statements

This press release may be deemed to contain forward-looking statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including the expectation that the Internet of Everything (IoE) will enable global private-sector businesses to generate profits, and the potential of IoE to enable businesses and add to their bottom line. Readers are cautioned that these forward-looking statements are only predictions and may differ materially from actual future events or results due to a variety of factors, including, among other things, business and economic conditions and growth trends in the networking industry, our customer markets and various geographic regions; global economic conditions and uncertainties in the geopolitical environment; overall information technology spending; the growth and evolution of the Internet and levels of capital spending on Internet-based systems; dependence on the introduction and market acceptance of new product offerings and standards; rapid technological and market change; risks related to the global nature of our operations, including our operations in emerging markets; and other risk factors set forth in Cisco's most recent reports on Form 10-K and Form 10-Q. Any forward-looking statements in this release are based on limited information currently available to Cisco, which is subject to change, and Cisco will not necessarily update the information.